Amour Club News

Kiting – is not simply a kind of sport, hobby or pleasure. It is a certain style of living, the life vision, and finally philosophy. Those, who are devoted to this kind of sport, have a little bit different priorities in life. This is a world of free, physically well-trained people, who are healthy and fearless. They are not waiting for a vacation in order to devote time for their hobby. They dart off to certain place of the planet where meteorologists forecast the wind and the wave.

Sometimes people use a word “kitboarding” to define this sport, this is more habitual for foreigners. Ukrainians are more accustomed to the word “kitsurfing”, because almost everybody knows the meaning of word “surfing”.Kitsurfing, windsurfing and surfing are very similar to each other as kinds of sport. But kiting has some advantages over others. Firstly, it is enough just one usual bag to put all outfit in it. This is not the case when you are thinking where to put a surfing board of 2 - 2,5 meters long if you decided to start learning windsurfing.  Secondly, lessons of windsurfing can only be carried near windsurfing rent stations, while you can practice kitsurfing everywhere. If you want to learn kiting, you don’t need to undergo some sophisticated physical trainings, it is enough simply to be harmonious. There are also no age limits. Children at the age of 10 may start learning. And they learn very quickly. The best sportsmen will become the one, who is ready to feel the wave and release all fears. But everyone should start with learning theory. This is an important requirement, because you must know how the kit is built, why does he fly, what does wind window mean and other vital technical aspects. Only after learning this all, you may start practicing. The length of course varies. It depends on your ability to learn. You should not undervalue the role of instructor. He must always stay close to you, control everything and be ready to help you anytime. This makes actually the main difficulty of kiting.

P.S. In Odessa it is possible to learn kiting in the “School of Malyarova” located in Zatoka region (Carolina-Bugaz) or SunMarine club (sunmarine.od.ua).

According to researches of foreign analytics, an average statistical manager spends almost 3 years on an airplane, 2 years on the road to an airport and back, 23 months of waiting for the flight, 3 months of searching the place for the parking. And really, the business that is closely connected with often negotiations or meetings outside the city, demands particular tenacity and patience. Besides time expenses, companies used to spend huge budgets on journeys and the residence of their employees. In such cases an excellent opportunity to economize becomes spending money on videoconferencing. This is a new technology for Ukraine which enables the participants of conferences to see and hear each other, to share the data and jointly work on it. 

“Videoconferencing allows business to make a new step in its development, expedite the process of decision making, as the visual contact can be set in few minutes”- says the system manager of “Cisco” company. The most distinguishing feature of videoconferencing is the high quality in video and audio transmission. This technology is already applied in Ukraine by “MTS” company. The press secretary of “MTS” says that it allows to study colleague’s mimicry, gestures, that increases the efficiency of interactive meetings. The videoconferencing is highly demanded by enterprises that have geographically distributed structure, regardless of company’s specialization. So, “MTS-Ukraine” uses it regularly. They held the conferences between top-managers and partners. The First Ukrainian International Bank (in Ukrainian so-called “ПУМБ”) was the first bank to start using videoconferencing in practice. It helped them to carry negotiations with bank representative offices in Kiev, Donetsk and other twelve out-of-town offices. In other Ukrainian company “TNK-BP” meetings are often held through the videoconferencing and they are quite happy with it. 

Despite relatively “young age” of Ukrainian videoconferencing market, it is highly demanded. And such leading world-known firms as “Cisco”, “Sony”, “Tandberg” prepare their businesses to offer new products and services to Ukrainian companies. 

Ukrainian confectionary market has almost stopped its quantitative growth. Instead, the producers decided to focus on the quality and marginal values. And this approach turns to be successful: in 2007 the increase in volume production is expected on the level of 5%; at that time expected growth in money equivalent should reach almost 2 billion dollars or 20%. Such “re-orientation” can be explained by mass modernization of existing facilities and introduction of new production lines. One of the most active investor during the last years was “KONTI” company. During this summer it had launched its own logistic center and held the presentation of new high-tech production complex. The last one is considered to be the most up-to-date not only in Ukraine, but in Eastern Europe too. They had invested 110 million dollars in its building. The capacity is nearly 53 thousand tons. This project was realized in a brief period of time – 3 years, and 3 years is considered to be the record for such large-scale modernization. New complex will operate on the base of the equipment from such world-known producers as “Сhokotech”, “Sollich”, “Winkler und Dunnebier”, “Loesh” (Germany), “Buhler” (Switzerland), “Bosh Tevofarm” (Holland).

One noticeable tendency of last year is re-orientation on more expensive segment. This is not surprising fact, as the profitability of producing chocolate is twice higher than caramel production has. The new players of chocolate segment will compete with famous brands, whose popularity is high due to the solid experience, mass advertising and their quality. Nevertheless, the real competition only starts. Taking into account the amounts of investments into chocolate production, the winners become whose companies that won’t grudge on marketing and advertisement.

Ukrainian domestic television market gradually improves and becomes all-sufficient. Holders of popular Ukrainian TV channels bit by bit start realizing that their businesses cannot remain forever toys in their hands and will definitely need other vectors for development in the near future.  TV channels can’t solely work as instruments for the realization of owner’s private ambitions and broadening of their political influence, as they serve today. Sooner or later, Ukrainian TV market will get a new impulse, which will force holders (our prominent Ukrainian oligarchs) to reconsider their strategies.  This thought is even now testified by just another revision of property that takes place today. Smart owners try to control assets and develop new spheres of business at the same time. For example, the company “1+1” had already started to develop their internet site. In such way the channel hopes to gain another 150 thousands of people to their traditional audience.  Besides, shareholders of “1+1” continue developing cinema business. In Odessa they opened a big cinema complex, consisting of 8 halls, the biggest cinema in the country. ICTV channel is targeted on selling DVD and films distribution. TV can become an excellent ground for other businesses. People can buy books, advertised in TV-shops or the same clothes that wear their favorite presenters. Nevertheless, the owners are mostly occupied by counting their profits. Another interesting fact: none of them is ready to point an exact price for their media holdings. May be they are simply waiting for proposals? Meanwhile, the concentration of property takes place. Not so long ago, Viktor Pynchuk started consolidation of his three channels: aforementioned “ICTV”, “STB” and “New channel”. Something similar carried business groups with industrial assets. They put in order the system of property rights, optimized industrial processes, singled out financial center. All these procedures helped to raise company’s capitalization. Some of businesses were finally sold; others are still waiting for foreign investors.
Today Ukrainian media market is one of the most rapidly developing in the world. The market increases annually by 40%. And there all grounds to expect during next 2-3 years the same positive trends. Even in Russia, in spite of substantial limitation of TV advertising, the market has grown by 60%. We should always keep in mind that Ukrainian market has much in common with the last one. The weight of TV advertising in Ukraine is one of the highest in Europe – 70%. So the best opportunities for “skimming the cream” have TV channels. However, everything is not so simple. The competition on Ukrainian TV market is very tough, and market capacity is smaller than average European. It is also impossible to set new channel, as there are no free frequencies. But nevertheless, the question of investments remains a question of big importance. Media will always remain the creative and profitable business. Important plus in favor of starting TV business, is that local authorities are usually more interested in friendly relations than in any other sector of economy. Rupert Merdoc, the owner of “News corporation” (the global empire, holding nearly 150 newspapers and journals) once shared his wise observation concerning perspectives of TV business. He said: “I’ve borrowed so much, that none of the banks will ever let me bankrupt”. All this should persuade strategic investor keep an eye on Ukrainian TV market.

The aim of the previous publication was to underline the perspectives of luxury hotels on Ukrainian market. Hence, it didn’t give an accurate account of all accommodation services. This article tries to analyze perspectives of capital investments to other classes of Ukrainian hotels. 

 Increasing of the number of tourists would always result in increasing the demand for hotel services. Rise of activity in the segment of business tourism exposed a critical shortage of economy class as well as 3-star and 4-star hotels in our country. However, the highest demand is for single standard (economy) rooms. According to the National Tourist Administration of Ukraine currently there are two hotel beds per 1,000 inhabitants which means that attractive and vacant niches on the market of hotel services are still available. (For comparison, this index in Moscow is 9, in Paris – 38, in Europe 14-18 hotel beds). So far the shortage of hotel rooms contributes to keeping accommodation prices at high levels. The prices offered by the hotels today are slightly exaggerated. Prices in the hotels of Ukraine vary from $10-20 a day in hotel-type hostels to $500 and higher in high-star hotels. That gives an explanation to the question why does the average investment recovery period for a hotel in the West comprise 8-10 years, but in Ukraine this index can be 5-7 years. 

Shortage of hotel capacities in Ukraine is obvious. Due to the absence of local hotel operators every dollar invested into the hotel sector in Ukraine will bring quasi rent in the nearest future, project recovery periods being much shorter than the average ones worldwide. Investors’ interests today are due to be concentrated on major projects with good future prospects for the sector development. Construction of mini hotels, separate complexes with well-developed infrastructure (entertainment centers, etc.) as well as hostel-type hotels is currently the most promising investment attraction. Proceeding from the current dynamics of youth tourism development one can undoubtedly forecast arising of more hostel-type hotels. According to our calculations the average cost recovery period for establishing a hostel-type hotel is 3-4 years. It doesn’t seem to be very long for hostels of improved conveniences with expected yearly income of $1mln. According to our experts, the investment volume for constructing a new hostel building might be $1.5-3mln depending on the quality of the rooms. 

In general, the Ukrainian hotel business can be estimated as a complicated but promising market for investors. Building hotels of different classes in such regions of the country as the Crimea, the Black Sea coast and the Carpathian Mountains will be particular profitable field for foreign businessmen to invest. 

Men wearing expensive brand-new suits and ladies wearing evening dresses were moving towards an entrance of the mirror-like building. The cream of diplomatic and business public of Kiev gathered at the opening ceremony of the new 5 star hotel Hyatt.
“There are no free places in hotel by now. If you want to have a rest at weekend, you must reserve a room well in advance” – warned the public a presenter of Hyatt Hotel, thereby making clear for all that 234 rooms at the price of 330-360 euros are already bought. There are as many as three 5star hotels in the capital today, but all the same they are not ready to satisfy the catastrophically growing demand.
The main hotel manager Steven Ansel makes no secret of the fact that he counts on 70% fillability, while the usual figure for hotels in Europe comprise nearly 30-50%. Managers of two other prestigious hotels, Opera and Premier Palace, confess that the average fillability of their hotels is around 60-65% and they are not afraid that an arrival of a new player will ever lead to the flow-out of their clients.
“The foreigner 35-45 years old, most likely German or Englishman, manager of high or medium level, a business owner” –this is the typical appearance of the client given by the sale manager of Opera Hotel, where the price reaches 310-760 euro for the room. Very similarly tend to look clients of Premier Palace. Hotel managers of the last only specify that approximately a quarter of all guests are Russians and only 8% - Ukrainians. Till 2001 Premier palace owners enjoyed all advantages that monopoly brings. They had invested 100 million dollars and planned to cover these costs in 8-12 year period. Today their business prospers and everything goes even better than it was planned at first. Besides the main business, an additional profit is brought thanks to fitness-clubs, bars, restaurants, actively visited by guests and luxury lovers. The holder of Opera is company “System Capital Management”, ruled by widely known in Ukraine rich man Renate Ahmetov.  To all appearances, hotel business is in among Ukrainian multi-millionaires. In the next year very close to Hyatt should appear another hotel-giant of international network – “InterContinental-Kiev”. The holder of “21 century” also promises to open another 5star hotel “Sofitel” and going to turn 90 million of initial investments into fashionable hotel not without the help of French colleagues from “Accor group”. During 2009-2010 should also appear “Hilton”. Somehow or other, investors tie up this prospective hotel boom with the forthcoming “Euro-2012”.

Recently in mass-media appeared a number of scandal publications about the loss of unique porcelain collection. As experts of art say, its price might reach $200 thousand if one day it would be sold on Sotheby. The loss of service was revealed by workers of Ukrainian state property fund while they were checking archives of rent enterprise named “Deffo”. A year before a contract was signed, according to which the collection should be moved to the Museum of Ukrainian decorative art. In fact, it was handed to one of the members of supervisory board – some gentleman Kafte, who was even paid extra $12 thousand for its storage. The location of gentleman today, as well as collection today remains a mystery.
Ukrainian producers were always famed for their porcelains. They started to produce porcelains since 17 century. Numerous manufactories are located not far from the raw sources – kaolin deposits. For this reason, the majority of enterprises are situated in Gitomirskiy region. During Soviet times Ukraine supplied all Union republics with the porcelain and delft ware. After 90’s the branch felt into decay. The financial situation of practically all factories was continually worsening. The privatization of those years wasn’t favorable for investments. Enterprises didn’t change methods of work, loosing their competitiveness on the market. Many of them had finally bankrupted. The share of porcelain production is now reduced from 30% to 11%. To the present time only 11 survived of the previous 36. Three of them produce electro technical porcelain, and their production is highly demanded by the market. Others do not have much to boast with, almost all are unprofitable. They didn’t bear the competition with Chinese masters. Most domestic enterprises stopped their activity after just another price rise of energy. The energy price makes 70% of cost price. The situation can be well understood after number of visits to the main shops. It is really difficult to find Ukrainian porcelain there. Few tea services vanish away among the diversity of Czech and Chinese products. Polish and Japanese services are also well presented. The cheap segment (40-50$ for one service) is occupied by Chinese mass consumption goods, the middle one (100-800$) by Czech and Polish production, the expensive niche (1000$ and more) is occupied by products of Italian, Japanese and German firms. Unfortunately, Ukrainian cups and plates can’t compare with foreign quality and design. But only few decades ago they were distinguished by its originality and could be easily bought in any central shops. Ukrainian skilled craftsmen used hand paintings, precious metals and high-quality raw materials. After 90’s, producers were forced to sacrifice all this benefits to the favor of cheapness. Today home producers complain about the lack of demand.
Why opportunities and high potential of the branch are not used?  For sure, Ukraine can perfectly be one of the word leaders in ceramics and become famous for its unique production. Even more so, considering that our kaolin and quartz sands are best in the world. Moreover, their deposits are enough for hundreds of years ahead. What is important, Ukraine also posses such demanded raw materials, as fire-clay, pigment, gypsum. They are traditionally produced here. Truly, porcelain sphere is potentially very strong. On the other hand, all experts agree that the branch experiences a serious lack of investments. Mainly, enterprises need solid money for the rapid modernization (the same equipment serve the branch since Soviet epoch).  So, all hopes of producers are connected with the large-scale business modernization. Definitely, our “fragile branch” needs the state support. For example, the similar problem few years before experienced Russia. And what they’ve done was easing tax burden and opening the market for foreign investments. During 90’s people could not imagine nowadays problems, all were hunting for bounds to buy. Today is a new time for the porcelain branch - the time of effective management and therefore foreign capital is highly demanded.

It is a worldwide tendency that flows of investment rush into developing markets. This causes a rapid modernization in the global retail. More retailers are pursuing new growth opportunities. They start to compete for countries, which are new to modern retailing; they compete for smaller cities (as larger cities become saturated). 

Ukraine continues to be an attractive Eastern European retail market; it grew by more than 25% in 2006. A majority of the Ukrainian retail market is still composed of family-owned shops, but many Ukrainians are beginning to prefer shopping in malls and supermarkets. Food retail accounts for almost half of the entire retail market and there are plenty of opportunities for foreign investment. Domestic competition, meanwhile, is heating up. Ukrainian food retailer Furshet, for example, hopes to beat out foreign entrants by nearly doubling its number of supermarkets. International retailers began to enter Ukraine in the early 2000’s. Rewe, Spar, Metro were some of the pioneers. Metro appears to have outpaced the others, expanding aggressively by opening 13 stores in the past 3 years. Its success demonstrates how lucrative the Ukrainian market can be. Auchan and IKEA are both actively looking for retail space. Italy’s King Cross, which builds and operates large shopping centers, is constructing a massive entertainment and shopping center in Lviv, set to open in 2008. The company is already planning to expand into other Ukrainian cities. The window of opportunity for foreign large-scale supermarkets and convenience stores will likely to open in the next year or two. Multilevel fashion malls and mixed use centers are expected to be successful. 

Almost each fourth registered fund in Ukraine is actually a closed estate fund. The niche of estate funds remains rather vacant. The real competition between share investment funds of estate only begins. This happens because all main companies try to establish their businesses in regions. It can be considered the first noticeable tendency. And another one is the rapt attention of foreigners towards Ukrainian estate market.
 Today the only stocks of DUPD (Dragon-Ukrainian Properties & Development Plc) are circulating on an international stock exchange. It is the first investment fund of estate in Ukraine. Its capitalization makes up $275,3 million. “Foreign investors evaluate very positively the perspective of Ukrainian estate market and the level of income that could be potentially reached here”, - says the manager of Dragon Capital Partners.
Only three years before the market of estate investment funds didn’t exist in Ukraine. The single firm “ART-Capital” was trading with its stocks during August 2005. A little bit later such companies as “Synergy Real Estate”, “Parex fund of Ukrainian Estate” appeared. As the time goes by, joint investments in estate market are becoming more and more popular both among corporate and private clients. However, usual citizens may find such type of funds particularly attractive too. Mainly these are people those incomes are not impressively high and those who cannot afford mortgage in banks. Now the majority of shareholders is presented by corporate investors. And this fact is not surprising at all. As experts say that the largest part of existing funds was designed as certain projects for certain people. Besides, the price of “entrance ticket” to all estate funds was rather expensive. The up-to-date development of closed funds can be characterized as slow, but confident motion towards the retail client.

 Today there is no any generally adopted classification of estate funds in Ukraine. Simplistically they are divided by professionals into two categories: rent and development funds. First ones usually buy some property or commercial buildings and make money while leasing it. However, the majority of Ukrainian funds can be referred to the second category. Managers of such funds usually have tied business with building companies. Such funds finance the building of estate at the expense of the capital accumulated by fund. The main income shareholders obtain after projects realization. The advantage of such funds is that they secure very high yield (about 35-60% annual). On the other hand, the shareholder bears all developer’s risks. The rent funds are more transparent and reliable as they assume buying of already existing object. The risks are connected with the dynamics of rent rates. Their main disadvantage is comparatively low income (12-15%). There is a substantial lack of investment fund which deal with land. The scheme of their work is following: the fund obtains the land, signs the contract with building company and sells cottages and land under them. Players of estate market are sure that such kind of business, which involves funds, can become very popular for out-of-town estate segment. Let’s consider other views. Analysts of company “Colliers” say that office and trade estate will appear as most attractive for funds in Ukraine. At the same time, the segment of storage rooms is also interesting to them, as there is lack of assets too.

In conclusion, it is important to stress, that a yield for all types of commercial estate in Ukraine is almost twice higher than average European level is: for offices and trading centers – 12-15% (the European level is 5-6%), for storage estate – 15-17% (the European level is 7-8%).        

Moscow is an in-your-face metropolis that can often overwhelm with monstrous-sized avenues, unbearable traffic jams, and a 24-hour lifestyle a la New York or London that seems to exclude any peace and harmony. But behind that brash facade is a city that has been built up and knocked down and built up again for centuries. Not only is Moscow the country’s political capital, it is also the country’s major intellectual and cultural center, boasting numerous theaters and playhouses. Moscow is Russia’s familial heart. It is a city in which one comes face to face with all that is finest and all that is most frustrating in Russia.

Points of interest or main sites worth to visit:
 The Kremlin. Russia’s mythic refuge, the Kremlin is a self-contained city with a multitude of palaces, armories, and churches. The word “kremlin” simply means “fortified town.” The Kremlin dates back to 1147 and the very beginnings of Moscow. Most visitors are surprised to see so many churches in what was, for decades, but the Kremlin was once the centre of Russia’s Church as well as its State. Start with Archangel Cathedral (the royal burial church), Assumption Cathedral (the burial church of religious leaders) and Annunciation Cathedral (icons, icons everywhere). Continue on to the Tsar Bell, the world’s largest bell. Turn right after exiting through Kutafya Tower and walk back down to the Aleksandrovsky Sad. Retrace your steps through the garden past the Tomb of the Unknown Soldier. Turn right once again, following the wall of the Kremlin. Walk through the ornate wrought-iron gates topped with gold past the rear of the redbrick Historical Museum. After passing by the statue of General Zhukov astride a horse, take a right to reach the awesome multicolor Resurrection Gates. Pass through the gates to reach Red Square.

Russia’s mythic refuge, the Kremlin is a self-contained city with a multitude of palaces, armories, and churches. The word “kremlin” simply means “fortified town.” The Kremlin dates back to 1147 and the very beginnings of Moscow. Most visitors are surprised to see so many churches in what was, for decades, but the Kremlin was once the centre of Russia’s Church as well as its State. Start with Archangel Cathedral (the royal burial church), Assumption Cathedral (the burial church of religious leaders) and Annunciation Cathedral (icons, icons everywhere). Continue on to the , the world’s largest bell. Turn right after exiting through Kutafya Tower and walk back down to the Aleksandrovsky Sad. Retrace your steps through the garden past the Tomb of the Unknown Soldier. Turn right once again, following the wall of the Kremlin. Walk through the ornate wrought-iron gates topped with gold past the rear of the redbrick . After passing by the statue of General Zhukov astride a horse, take a right to reach the awesome multicolor . Pass through the gates to reach .
Red Square.The square’s name is not an allusion to Communism, but in fact dates back to the 17th century: The adjective krasnaya originally meant “beautiful,” but the word’s meaning gradually changed to “red.” At night floodlights illuminate the square and the red stars atop the Kremlin towers are lit from inside. Although the Square is no longer witness to the imposing parades of May Day, it remains a profoundly impressive space. As you enter the square, the stunning multicolor onion domes of St. Basil’s Cathedral slowly come into view. Outside the cathedral doors are the Lobnoye Mesto and the Minin and Pozharsky statue; to the right is the Tower of the Savior. Opposite St. Basil’s, at the north end of Red Square, stands the Historical Museum. Running along the Kremlin wall is the Lenin Mausoleum, the world-famous and much-visited resting place of Communism’s greatest icon.
Lenin’s Tomb
Whether for the creepiness value or an interest in mummification, the granite tomb of Lenin is a must-see.Lenin’s embalmed body—or, some say, a wax likeness—has lain here since his death in 1924, except for a brief removal during World War II. From 1953 to 1961, Lenin shared his tomb with Stalin. In 1961 at the 22nd Party Congress, the esteemed and by then ancient Bolshevik, Madame Spiridonova, announced that Vladimir Ilich had appeared to her in a dream, insisting that he did not like spending eternity with his successor. With that, Stalin was removed, and given a place of honour immediately behind the mausoleum. The mausoleum is made of red, black, and gray granite.

St. Basil’s Cathedral
St. Basil’s rises from Red Square in an irresistible profusion of colors and shapes. Its montage of domes, cupolas, arches, towers, and spires, each bearing a distinctive pattern and hue, have fascinated the eyes of visitors since its construction in the 1550s.

Kitaigorod
To the East of Red Square extends the old district of Kitaigorod, once the merchants’ quarter, later the banking section, and now an administrative hub with various government offices and ministries. Encircling the Kremlin and Kitaigorod are the Bely Gorod [white city], traditionally the most elegant part of Moscow and now a commercial and cultural area; the Zemlyanoy Gorod [earth city], named for the earthen and wooden ramparts that once surrounded it; and the inner suburbs.

Tretyakov Gallery
Tretyakov Gallery is just spectacular, with the world’s best collection of Russian icons and a stash of other pre-revolutionary Russian art. It possesses the finest collection of traditional Russian painting in the world. The core of the museum’s collection was assembled in the middle of the nineteenth century by Pavel Tretyakov, a wealthy Moscow merchant. While everything in the Tretyakov deserves and rewards patient attention, its collection of icons stands as the definitive presentation of this most Russian of art forms.About 200 icons are displayed there, and the building functions as both church and museum.

Bolshoi Theatre
An evening at the Bolshoi is still one of Moscow’s most romantic options, with an electric atmosphere in the glittering six-tier auditorium. Locals love to bemoan sinking standards and soaring prices at the Bolshoi, but the opera and ballet performances here are still world-class. The building itself is a masterpiece of Russian neoclassicism. Even seats on the fourth balcony offer a great view of the rococo interior, replete with chandeliers, gold stucco, and red velvet. Book ahead (up to 60 days in advance) otherwise, the easiest way to get tickets is to go there on the day of the performance and buy them from a tout. Expect a lot to be paid.